The continuing "commodity surge" this week shows there's no end in sight for how high things will go. Many currencies reached new highs against the U.S. dollar, and oil and gold also reached levels never achieved before.
Ongoing concerns about recession will keep investors interested in commodities, as well as other concerns of stagflation, inflation, weakness of the U.S. dollar, and the crisis in the banking system.
Here's the commodity news from around the web:
Record euro, commodities driven by fears of inflation
Record highs for the euro, oil, gold and a host of commodities are both cause and consequence of inflation as investors seek a safe haven from an economic storm sparked by the collapse of the US property market, analysts said Friday.
They said the main concern for investors was stagflation, which occurs when when inflation rises even as growth slows in the worst possible economic combination and was the blight of the 1970s.
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Commodities boom to keep breakfast hot for a while
The commodities boom has a long way to run because demand is outstripping supply, with panicking investors snapping up gold and Asian appetites driving up the cost of the world's breakfasts, Schroders commodities product manager Christopher Wyke said on Friday.
With financial markets quaking at the prospect of a U.S. recession, investors are flocking to gold , which has hit repeated record highs and is approaching $1,000 an ounce.
"We think gold prices will continue to rise sharply in 2008," Wyke told a briefing in Hong Kong.
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Commodities Wrap: Coffee and Beef
Coffee Costs Force Price Increase, Beef Acquisition Raises Hopes for Better Profits
It was a week of mixed messages for food makers, as commodity costs forced one company to raise prices for the first time since 2005 and an acquisition in the beef sector raised hopes for better profits.
Green Mountain Coffee Roasters Inc. said Wednesday it would have to raise its prices by 8 percent to 12 percent on average across all of the coffee products sold in the Green Mountain coffee division, on orders placed on or after May 5. The price increase will affect both its Green Mountain packaged coffees as well as its K-Cup single-portion packs.
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U.S. equities, employment, Canadian dollar, Fed, commodities
U.S. equity index futures are lower in pre-opening trade. Dow futures are down 130 points. Traders were disappointed with the February employment report. Consensus for February Non-farm payrolls was an increase of 20,000. Actual was a decline of 63,000. Consensus for the February unemployment rate was 5.0%. Actual was 4.8%. However, the drop was attributed to a decline in the number of people who are seeking employment.
The U.S. employment report triggered additional weakness in the U.S. Dollar and strength in the Canadian Dollar and Euro. The Canadian Dollar also was buoyed by news that Canada added another 44,000 jobs in February. The Canadian dollar is up 0.80 in pre-opening trade.
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Fisher Says Commodities Make Reading Inflation Harder
Federal Reserve Bank of Dallas President Richard W. Fisher said ``persistent'' increases in commodity prices make it harder for central bankers to determine precisely how much inflation may be rising.
``The fact that these increases have been persistent and not quickly reversed has raised tough questions about traditional measures of core inflation,'' Fisher said in the text of a speech today in Paris. That's also ``made it increasingly difficult for central bankers to separate signal from noise in the inflation data.''
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Commodities zoom, but could crash and burn
One sure way to lose money as an investor is to buy something strictly because it keeps going up.
Now, analysts are warning investors not to become carried away with commodities. Although gold, oil, metals and agricultural commodities have been breaking records and enriching investors while the stock market has been a loser, many analysts are growing skeptical.
“The price trend in wheat, oil and gold appears to be similar to the ones seen in the late 1990s for the Nasdaq, and in the mid-2000s for home builders,” Citigroup strategist Tobias Levkovich said last week.
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Rush to commodities not over, analysts say
Investors have turned from risky securities in recent months literally to bread and butter investments, namely raw commodities, such as metals, grains and oil.
But, analysts wonder when the bubble will burst. The run on commodities in world markets is probably not over, analysts told Friday's Science Christian Monitor.
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